“We look for the Bank of Canada to hold rates unchanged at 1.75%, but we except the MPR to include a 0.2 p.p. downgrade to 2019 GDP growth,” said TD Securities analysts previewing the next BoC meeting.
Key quotes
“We also look for additional dovish tweaks to the forward-looking language.”
“FX: The loonie continues to sort through conflicting factors related to a weaker local one and a seemingly improving global one. We like tactical short exposure to CAD on crosses like AUD and SEK.”
“Rates: Risk/reward skews to lower rates on more dovish forward guidance. We like owning the front-end versus the US and 2s5s flatteners. We look for the BoC to hold at 1.75% for an indefinite period of time.”
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